Forward is the other direction
Robert Burke Last week, readers learned that Wisconsin tax collections for the last fiscal year were down 2 percent from projections and by over 1 percent from the previous year. In January, as legislators from all over Wisconsin were high-fiving...
Last week, readers learned that Wisconsin tax collections for the last fiscal year were down 2 percent from projections and by over 1 percent from the previous year. In January, as legislators from all over Wisconsin were high-fiving the rainbow and unicorn projections for revenues, I was asked what I would do with the projected budget surplus. My response was to place it in reserves as Wisconsin would face tough times ahead.
Wisconsin politicians on the Red and Blue teams have been unable to set aside enough of the short-term revenue growth that comes in during an economic boom to avoid later tax increases and/or spending cuts when the economy turns sour. State reserves are expected to drop to 8.6 percent of spending this year and to 7.4 percent next year, according to experts in the Wisconsin Taxpayer Alliance (WisTax).
Rather than use increased revenue to pay down the $13.7 billion in debt accumulated during the last decade or rebuild General Fund Reserves, the Blue Team wanted to spend it and the Red Team wanted to reduce taxes. Dealing with debt has and continues to be a bipartisan abdication, according to Dale Knapp, research director at WisTax.
Wisconsin’s budget balances are declining from 5.3 percent of spending last year to 1 percent next year, which is close to the level Wisconsin carried at the beginning of the last recession, which led to our increased long-term debt. Budget experts recommend savings of at least 5 percent of spending. More would be even better. Mary Burke and Scott Walker are not listening.
The punch bowl of the Federal Reserve is being removed and is scheduled to end in October. Layoffs have begun in earnest and our state faces a new set of serious problems. We have a housing bubble bursting with sales off 10 percent, we have an education bubble bursting and Mary Burke wants to shift the losses to Wisconsin taxpayers. Businesses are closing, such as Sears, Radio Shack, J.C. Penney, and Kmart, which are manifestations of the larger job losses, which include OshKosh Corp, Caterpillar, and Dominion Energy.
We have hit an inflection point in our economy. We have major inflation occurring in our food prices that will tie the hands of further central bank stimulus. The next step will be for interest rates to first bottom out at near historic lows before rising precipitously and squeezing small- and mid-sized businesses, which depend on a business model rebuilt on five years of manipulated credit markets.
Given Wisconsin’s lousy preparation for hard times in the past, do voters think the state government should put more money aside for hard times, or less? Out of the four candidates, I am the only one running for governor who is fiscally conservative and socially liberal. I am the candidate willing and able to deal with the impending problems facing Wisconsin’s economy and I believe, “Forward is in the other direction.”
Robert Burke, a candidate for Wisconsin governor, is a resident of the town of Hudson and a former nationally recognized specialist in Long Term Care planning. In 2014 launched the joint campaign called the Wisconsin Liberty Coalition which has 11 candidates for office including all five statewide seats, four state Assembly, one state Senate and one for U.S. Congress in Wisconsin’s 6th Congressional District.